Differential Games in Industrial Economics

A comprehensive and self-contained exposition of the applications of optimal control and differential game theory to industrial organisation and trade.

Luca Lambertini (Author)

9781107164680, Cambridge University Press

Hardback, published 26 April 2018

272 pages, 25 b/w illus.
25.4 x 17.9 x 1.9 cm, 0.64 kg

Game theory has revolutionised our understanding of industrial organisation and the traditional theory of the firm. Despite these advances, industrial economists have tended to rely on a restricted set of tools from game theory, focusing on static and repeated games to analyse firm structure and behaviour. Luca Lambertini, a leading expert on the application of differential game theory to economics, argues that many dynamic phenomena in industrial organisation (such as monopoly, oligopoly, advertising, R&D races) can be better understood and analysed through the use of differential games. After illustrating the basic elements of the theory, Lambertini guides the reader through the main models, spanning from optimal control problems describing the behaviour of a monopolist through to oligopoly games in which firms' strategies include prices, quantities and investments. This approach will be of great value to students and researchers in economics and those interested in advanced applications of game theory.

1. Elements of optimal control, dynamic programming and differential game theory
2. Monopoly
3. Oligopoly
4. Advertising
5. Product differentiation
6. Innovation
7. The environment and natural resources
8. International trade
9. Stackelberg games
Index.

Subject Areas: Applied mathematics [PBW], Game theory [PBUD], Optimization [PBU], Econometrics [KCH], Economics of industrial organisation [KCD], Economics [KC]